2008.05.06

For the past year or so that I’ve been writing about personal finance (and, for the past 4 or 5 years that I’ve been obsessed with it), I’ve changed my mind on a number of things. One constant has remained, however: My position on having a budget.

Historically, I’ve been pretty nonchalant about a budget. My calculus teacher (Crouching Snider, hidden Math Test) once even described me as “cavalier” about such matters… (actually, that was with math homework, but it’s the same thing). Having prided myself on such a disposition (and such credentials), I continued merrily along until I saw this graph this afternoon, which stopped me dead in my tracks:

“Crap!” I thought. While a large portion of the larger expenses have been reimbursed (a large portion of travel expenses, and about $1800 from Shopping in the form of my sister’s laptop), that’s still a lot of loss. Tightening up the ship a bit couldn’t hurt in this case.

The bills and utilities portion has already been addressed — I’ve refined my cell phone plan to keep overages at bay for my new usage patterns. There’s not much I can do about auto costs… Healthcare was in the form of new glasses, that should be a one-time thing. Education is a fixed cost. Food has been astronomical because of the expensive Vegas food I consumed, as well as the more frequent dates I’ve been participating in. After that, the amounts are so small that it’s not as much of a focal point.

The next graph is a bit more reassuring:

Looks like I’m largely staying on track with my spending (again, disregarding the $1800 laptop expense for my sister). Plenty of room for refinement, but no inevitable disaster looms on the horizon. Too bad I couldn’t capture last month’s graph for better trend-tracking purposes.

It looks like habits are just that – habits. Since I’ve never had the habits of a spender, not having a budget hasn’t ever been a problem. For people who are more inclined to be spenders, or less inclined to be savers, a budget can be a helpful tool in keeping expenses under control. I can see applicability for this even for myself though. Marking progress across the month can help me to keep stuff from creeping slowly beyond its allotment. We’ll see how that goes.

One thing has always fascinated me though: How does everyone else manager and track their budget?